TaxTMI 
TaxTMI 
2021 (9) TMI 369
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....p Act. It is engaged in the business of importing and trading spices. It has placed orders for purchase of pepper (Black Pepper) of Sri Lankan Origin from various exporters in Sri Lanka. In furtherance of the said purchase orders, the pepper had been exported from Sri Lanka under various bills of lading against the notified quantity on various dates between 10.04.2021 and 27.04.2021. 3.The said consignments reached the Tuticorin Port in April 2021 and it is in the custody and control of the first respondent Customs Department. In this regard, according to the petitioner, he had provided all the documents to the customs Department for releasing of the goods, as the Black Pepper imported by the petitioner is not a prohibited goods, since the price of the Black Pepper is above Rs. 500/- per kg. Therefore, as stipulated under the Foreign Trade Policy adopted by the Central Government, these goods cannot be treated as a prohibited goods. Therefore, after collecting necessary customs duty, the goods in question shall be released by the respondent Department. However, since they have not released the same and they seized the goods on the alleged reason that the goods are prohibited on th....
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....ause, there is a Clear dichotomy between the request made by the appellant before us for provisional release and the investigation, which is now being conducted by the DRI. The appellant cannot mix up both, as both are independent to each other. 11.In any event, if a request is made by the appellant for provisional release before the Competent Authority, the Competent Authority is required to take a decision in the matter. As we pointed out earlier, there is no formal request made by the appellant for provisional release of the cargo and the representation dated 13.05.2021 given to the DRI is for release of the cargo and cannot be construed as an application for provisional release. 12.Therefore, we are of the considered view that the prayer sought for in the writ petition is not maintainable or rather has to be taken to be premature, considering the facts of the case, since the Revenue states that the import of black pepper into India, which is valued below Rs. 500/- is prohibited taking into consideration the welfare of the agriculturists and it is alleged by the DRI that the imports had been effected by the appellant by inflating the invoice value. We do not propose to ren....
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.... to which, the price of goods in question is rupees more than Five Hundred per kilogram. The rate fixed for each of the consignment as per kilogram in INR is Rs. 525 to Rs. 533 per kg. That is how, all the eight consignments were imported. Therefore, the learned Senior Counsel would submit that, as per the notification No.21/2015-2020 dated 25.07.2018 issued by the DGFT, Black Pepper garbied with Exim Code 09041130 and Black Pepper ungarbied with Exim Code 09041140 are prohibited items, provided, the import is free, if the CIF is above Rs. 500 per kg. Therefore, from the said notification, it has become clear that, once CIF of the goods referred to is above Rs. 500/- per kg, it is importable and it is not covered under the prohibited items as per the notification. 8.Therefore, citing the said notification, the learned Senior Counsel would contend that, since the rate of each of the consignment imported by the petitioner has been clearly stated, which is ranging from Rs. 525 to 533 per kg, certainly, it is above Rs. 500 per kg, therefore, it is free to be imported. As such, the respondent Customs have no right to retain the goods, hence, the goods in question should have been relea....
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.....12454 of 2021. 11.The learned Senior Counsel would further contend that the Writ Court, after having considered the said case and counter case projected by the importer as well as the Customs Department has ultimately come to the conclusion that, the said decision can be made as to whether the goods in question involved in that case is a prohibited goods or not, only after adjudication is completed. Therefore, at this juncture, that is, before adjudication process, since the goods in question is perishable and edible goods, the same can be released by way of provisional release and in that view of the matter, the Writ Court has passed the following order in the said writ petition. "12.I am given to understand by the learned Senior Standing Counsels for the Customs Department as well as for the DRI that the process of investigation would take some time and cannot be hurried. 13.The commodity in question is agricultural produce. The variety of black pepper imported is stated to be specific to the region of Srilanka, an important ingredient in the making of spices used in Indian cuisine, with a short shelf life. Assuming for the sake of argument that investigation is concluded ....
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....ting the Black Pepper as a prohibited item, but giving a concession that, if such Black Pepper is worth about more than Rs. 500/- per kg as CIF, then it is importable, because, in order to streamline the local market, where if low priced pepper is freely permitted to be imported to India, that will have a negative impact in the market economy. By which, the local producers, ie., the agriculturalists of the local pepper would get affected. In order to save the local agriculturalists, who produce the Black Pepper at various parts of this country, this kind of prohibition has been imposed by DGFT through the notification dated 25.07.2018. When such a notification was issued and it is in force, no pepper with the value of less than Rs. 500 per kg be permitted to be imported to Indian soil, as it is definitely a prohibited goods. If it is a prohibited goods, the only way out for the importer is, ofcourse after adjudication, to re-export the same, after paying penalty under various provisions of the Act. 15.In this regard, the learned Standing Counsel would further submit that, insofar as the redemption option for such kind of goods is concerned, as provided under Section 125 (1) of the....
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....position, the learned Standing Counsel would contend that, in the case in hand, since certainly the goods in question imported by the petitioner is a prohibited goods, though that can be ascertained to be declared as such, only after adjudication which formally has to be undertaken by the respondent Customs Department, the goods in question if it is released now by way of provisional release, that would go contra to the law declared by the Hon'ble Supreme Court in the aforesaid case in Raj Grow impex as by the time if such declaration has come after adjudication that the goods in question are prohibited goods, then, there would be no availability of the goods to absolutely confiscate and permit the importer to re-export the same, after paying penalty. By thus, the very purpose of prohibition by way of notification of DGFT dated 25.07.2018 would get defeated. That is the reason why the Customs Department, forecasting the same, has rejected now the plea of the petitioner to release the goods, by way of provisional release, through the impugned order. Hence, the learned Standing Counsel would seek sustainment of the impugned order and submits that it does not require any interfere....
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....impugned order that, the petitioner does not have even the right of making application seeking provisional release of the goods before adjudication commences. However, now the stand has been taken by the respondent Customs, as has been vehemently contended and projected by the learned Standing counsel for the respondent that, even the right of making application to get the provisional release of the goods, if it is a prohibited one, does not arise, as per the Hon'ble Supreme Court orders referred to above in Raj Grow Impex case. 24.In this context, it is the stand of the Customs Department to state that, if ultimately after adjudication, the Customs Department comes to the conclusion that the goods in question is a prohibited goods and in that case, in the meanwhile if by way of provisional release an importer gets the goods released and sell it in the market, there would be no chance for the Customs Department to confiscate the same and to permit the petitioner to re-export the same, after paying the penalty, as that is the term indicated by the Hon'ble Supreme Court in the said case. 25.However, the fact remains that, in the present case insofar as the goods in question....
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....et these kind of circumstances, whether a provisional release is permissible or not is the question here. 29.In this context, it is not the definite case of the Customs Department, even after quoting the judgment of the Hon'ble Supreme Court referred to above dated 17.06.2021 in Raj Grow Impex case that, such kind of right of importer even to make an application to get a provisional release is not available with importer. The fact situation is that, the importer has definitely got a right to make an application to get provisional release of the goods concerned, depending upon the nature of the goods. If it is edible goods or perishable goods, certainly, that kind of right would always be available to the importer to make an application to get it released by way of provisional release. This has been recognized by the Division Bench of this Court in the order referred to above dated 22.06.2021. That is the reason why, such permission was given to the petitioner to make application to the Customs Department for provisional release of the goods. 30.No doubt, that the application having been entertained, has been rejected by the Customs Department through the impugned order on the....
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....ccepted by the Customs Department, had been acted upon. This factor is not controverted by the Customs Side. It was the contention raised by the learned Standing Counsel appearing for the Customs Department that, if these kind of importers are permitted to import the prohibited goods and ultimately after adjudication, even though it comes to the conclusion that the goods in question are prohibited goods, if it is the case, where the goods in question cannot be made available for re-exporting, as indicated by the Hon'ble Supreme Court in Raj Grow Impex Case, these kind of importers would again involve in such kind of activity of importing prohibited goods, therefore, each and every occasion, the Customs Department would be put in trouble to go for full-fledged adjudication to establish the case that the particular consignment imported by the importer is prohibited goods. 34.Insofar as the said contention raised by the Customs Department is concerned, since these aspects has not been sofar agitated before any Court of law, this Court feels that, this kind of unscrupulous import, if finally adjudicated by the Customs Department that they imported only the prohibited goods, certai....
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.... in contravention of any provision of this Act or any rules or orders made thereunder or the foreign trade policy, the Director-General or any other officer authorised by him may call for the record or any other information from that person and may, after giving to that person a notice in writing informing him of the grounds on which it is proposed to suspend or cancel the Importer-exporter Code Number and after giving him a reasonable opportunity of making a representation in writing within such reasonable time as may be specified in the notice and, if that person so desires, of being heard, suspend for a period, as may be specified in the order, or cancel the Importer-exporter Code Number granted to that person.] (2) Where any Importer-exporter Code Number granted to a person has been suspended or cancelled under sub-section (1), that person shall not be entitled to import or export any goods or services or technology except under a special licence, granted, in such manner and subject to such conditions as may be prescribed, by the Director-General to that person." 36.Therefore, if at all the Customs Department finds with documents to substantiate that the goods in questi....